European stocks gain on US data

Bloomberg

Sun, Nov 04, 2012 - Page 15

European stocks advanced this week as companies from Royal Dutch Shell PLC to Deutsche Bank AG reported earnings that topped estimates, US jobs data beat forecasts and US markets reopened after Hurricane Sandy forced their closure for two days.

UBS AG, Switzerland’s biggest bank, jumped to a 15-month high after saying it will cut about 10,000 jobs to boost profitability. Shell, Europe’s biggest oil company, and Deutsche Bank AG, Germany’s largest lender, advanced more than 3 percent. Air France-KLM Group and Deutsche Lufthansa AG surged after posting earnings that beat analyst estimates.

The STOXX Europe 600 Index added 1.6 percent to 274.85 this week. The benchmark completed its fifth monthly rally on Wednesday and has surged 18 percent from this year’s low on June 4, as European Central Bank President Mario Draghi pledged to defend the euro at all costs and US Federal Reserve Chairman Ben Bernanke announced a third round of quantitative easing.

“The non-farm payroll figures confirm a US private sector that is printing jobs year-on-year at the same pace as back in 2004-05, which is good,” Peter Garnry, an equity strategist at Saxo Bank A/S in Copenhagen, wrote in a message. “The job report was better than expected, which adds to the other good reports this week, and it will likely carry the momentum for the week all the way home to show solid gains in stocks across the board.”

Hiring in the US increased more than forecast last month, as employers looked past slowing global growth and political gridlock at home.

A net 171,000 workers were added to payrolls after a 148,000 gain in September that was more than first estimated, US Department of Labor figures showed on Friday in Washington.

US consumer confidence also climbed last month to the highest in more than four years. The Conference Board’s index increased to 72.2, the highest since February 2008, from a revised 68.4 in September, figures from the New York-based private research group showed on Thursday. The reading was projected to rise to 73, according to the median estimate of economists.

Another report on Thursday showed US manufacturing expanded at a faster pace than forecast. The Institute for Supply Management’s factory index climbed to 51.7 last month from 51.5 in September. A reading of 50 is the dividing line between expansion and contraction.